Judge signals likely rejection of part of TikTok privacy settlement

WASHINGTON, Sept 19 (Reuters) – A proposed $400 million settlement between TikTok, ByteDance and the US Justice Department encountered an obstacle on Friday when a federal judge signaled he would reject a portion of the deal.

In August, TikTok and its Chinese parent company agreed to resolve claims that the short-video platform had violated US laws protecting children’s online privacy.

Under the arrangement, TikTok would pay $300 million upfront and another $100 million if a court ended a 2019 consent decree that the Federal Trade Commission imposed on Musical.ly, TikTok’s predecessor.

But US District Judge George H. Wu in Los Angeles said he was inclined to deny the request to terminate the consent decree and set a hearing for Monday.

Wu said that without additional details, the court "cannot determine that it constitutes a durable remedy or that termination is suitably tailored to the asserted change in circumstance," as he tentatively rejected the effort to end the decree.

The FTC said in 2019 that Musical.ly, which was later absorbed into TikTok, knew young children were using the app but collected names, email addresses and other personal information without parental consent. Musical.ly paid a $5.7 million fine to settle the allegations.

The consent decree requires TikTok to maintain certain reporting and record-keeping obligations through 2029.

TikTok and the Justice Department did not immediately respond to requests for comment on Saturday.

The $400 million settlement arose from a Justice Department lawsuit filed in 2024 that accused TikTok and ByteDance of failing to safeguard children’s privacy and illegally gathering their personal information.

The companies were accused of breaking a law that requires online services aimed at children to obtain parental consent before collecting information from users under 13.

The government said TikTok had undergone significant changes after the lawsuit was filed, including in its ownership structure, management, compliance functions and privacy practices.

In January, ByteDance agreed to establish a joint venture majority-owned by Americans to protect US user data and avert a US ban on an app used by more than 200 million Americans.

The TikTok US joint venture said in a court filing that all users must enter their date of birth to use the site, and it added that it had developed sophisticated age-moderation systems to identify children under 13 who misrepresented their age.